Community Health says data stolen in cyber attack from China

BOSTON/NEW YORK Community Health Systems Inc (CYH.N), one of the biggest U.S. hospital groups, said on Monday it was the victim of a cyber attack from China, resulting in the theft of Social Security numbers and other personal data belonging to 4.5 million patients.

Security experts said the hacking group, known as "APT 18," may have links to the Chinese government.

"APT 18" typically targets companies in the aerospace and defense, construction and engineering, technology, financial services and healthcare industry, said Charles Carmakal, managing director with FireEye Inc's (FEYE.O) Mandiant forensics unit, which led the investigation of the attack on Community Health in April and June.

"They have fairly advanced techniques for breaking into organizations as well as maintaining access for fairly long periods of times without getting detected," he said.

The information stolen from Community Health included patient names, addresses, birth dates, telephone numbers and Social Security numbers of people who were referred or received services from doctors affiliated with the hospital group in the last five years, the company said in a regulatory filing.

The stolen data did not include medical or clinical information, credit card numbers, or any intellectual property such as data on medical device development, said Community Health, which has 206 hospitals in 29 states.

The attack is the largest of its type involving patient information since a U.S. Department of Health and Human Services website started tracking such breaches in 2009. The previous record, an attack on a Montana Department of Public Health server, was disclosed in June and affected about 1 million people.

Chinese hacking groups are known for seeking intellectual property, such as product design, or information that might be of use in business or political negotiations.

Social Security numbers and other personal data are typically stolen by cybercriminals to sell on underground exchanges for use by others in identity theft.

Over the past six months Mandiant has seen a spike in cyber attacks on healthcare providers, although this was the first case it had seen in which a sophisticated Chinese group has stolen personal data, according to Carmakal. Mandiant monitors about 20 hacking groups in China.

NEW SCRUTINY

Cybersecurity has come under increased scrutiny at healthcare providers this year, both by law enforcement and attackers.

The FBI warned the industry in April that its protections were lax compared with other sectors, making it vulnerable to hackers looking for details that could be used to access bank accounts or obtain prescriptions.

Mandiant has tracked "APT 18" for four years. When asked if the hackers were linked to the Chinese government, Carmakal said it was "a possibility" but declined to elaborate.

Another cybersecurity firm, CrowdStrike, which has also been monitoring "APT 18" for about four years, said it believes the hackers are either backed by Beijing or work directly for the government, based on the targets they have chosen.

"They are of above average skill" among Chinese hackers, said Alperovitch, whose company dubbed the group "Dynamite Panda."

The issue of Chinese state-sponsored hacking is highly sensitive. Tensions between Washington and Beijing have grown since May, when a U.S. grand jury indicted five Chinese military officers on charges they hacked into American companies for sensitive manufacturing secrets. China has denied the charges.

FBI spokesman Joshua Campbell said his agency was investigating the Community Health case, but declined to elaborate.

The Department of Homeland Security said it believed the incident was isolated, although it shared technical details about the attack with other healthcare providers. An agency official told Reuters it was too soon to say who was behind the attack.

Community Health said it has removed malicious software used by the attackers from its systems and completed other remediation steps. It is now notifying patients and regulatory agencies, as required by law.

The company said it is insured against such losses and does not at this time expect a material adverse effect on financial results. Community Health's stock rose 66 cents, or 1.3 percent, to close at $51.66 on the New York Stock Exchange on Monday.

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